Does Your Organization Need a Project Management Office?
We know that the main objective behind setting up a project management office (PMO) is to accomplish business benefits by establishing and enforcing standard project management practices policies. As PMO matures in a given organization and people adopts PMO model well, it would serve a great source of project management guidance, support and performance evaluation platform. The PMO can easily report project status, issues or certain activities to executive management that warrant strategic inputs or update.
Background: The Way PMO Evolved Recently | Why PMO is Gaining Popularity?
Let me put across two facts in the beginning.
- Project management has history or statistics from the past such as Standish CHAOS report that opened management’s eyes wide and made them alert. Considerable proportion of failed project as reported in Standish report has made business managers cautious about new project undertaking. Businesses, industries were looking for better way to increase project success ration.
- In last decade, the subprime crisis in United States has had ripple effects on economies world over. So much so that even the fears of world economic slowdown still looming around and all major economies are grappling to come out of difficult time.
Both of these two factors combined, in last 8-9 years have really put lot of burden/ stressed project teams and especially project managers responsible for delivering project benefits. Changing economic and business situations, investors-sponsors expectations means businesses are struggling to survive. The question of survival means organizations have to undergo business changes, these changes imply project managers are expected to deliver business benefits. These business benefits are expected to help organization firstly survive, then grow.
But How Project Management Office (PMO) Came Into Picture?
With the backdrop of two factors mentioned above, some consulting organizations such as PriceWaterhouseCoopers researched project sponsors, participants and came up with interesting finding, that there are project success stories and these success stories are primarily related to mature project management processes. In turn, these researches (pdf file) highlighted role of established/ mature project management office in project success rate.
Businesses burnt with 2008 recession and forced to change in order to survive; have been looking for better or predictable way to deliver project successfully. Since any new project that would be approved or any existing project that would continue to run, are/will be expected to deliver benefits “show me the money”. These projects will be closely watched or scrutinized by top management leaving no-or-very-little room for failure.
Project Managers Need Guidance & Support
This has a direct implication on project managers. Project managers have been under tremendous pressure to deliver projects, since they are held responsible for their projects. This means, project managers and project team need more support, guidance and help to deliver project successfully. Such support and guidance can be provided by a established project management office (PMO).
Upward Trend for Project Management Office (PMO)
Since then there has been an upward trend seen for project management office. Distinct research carried out by project management interest group have also confirmed this trend. If we look at The State of The PMO 2012 report by PM Solution, it showed that more than 80% of the companies surveyed have established PMOs and many of the surveyed organizations have seen project success ratio going up after setting up PMOs.
PMO will help your organization with standardization of project management practices. Setting up a PMO will help to increase the chances of success for your projects. Depending on goals of establishing PMO and its implementation, this should translate into better efficiency in project management (e.g., higher ration of projects getting completed on time or higher share of project getting completed within budget, or projects with higher margin, etc)..
8 Reasons To Decide Whether Your Organization Need a Project Management Office (PMO)? And of What Kind?
Let me quickly list out 8 scenarios or reasons that your organization should consider to decide whether your organization need a project management office and of which type of PMO will be more suitable.
1. Multiple projects that requires greater coordination
If you have certain departments in your company which have taken up multiple projects but if they are finding it difficult to meet the deadline for project tasks, milestones, you can think of having Inter-departmental PMO. The PMO will help in improving the project management process and in turn project progress. PMO can guide as well as support a given department to set priorities for project tasks, managing resources better, optimizing cost factors and periodically reviewing project progress.
In the next post we will look at remaining scenarios and business cases that will help you decide whether you need a project management office or not.
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